Definition ∞ A price feed malfunction occurs when the data stream providing asset price information to a blockchain or decentralized application becomes inaccurate or ceases functioning correctly. This error can lead to incorrect liquidations, arbitrage opportunities, or smart contract failures. It poses a significant security risk for protocols relying on external price data. Such malfunctions can cause substantial financial losses.
Context ∞ News often reports on price feed malfunctions in the context of oracle exploits or network congestion affecting decentralized finance protocols. The industry actively works on developing more robust and decentralized oracle solutions to mitigate this risk. The reliability of price feeds is critical for the stability of the digital asset ecosystem.
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